M/S. MADHOOR BUILDWELL PVT. LTD. versus YEOLA MUNICIPAL COUNCIL & ORS.

Citation: [2019] 13 S.C.R. 646 · Decided: 04-10-2019 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Disposed off
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 13 S.C.R.
M/S. MADHOOR BUILDWELL PVT. LTD.
v.
YEOLA MUNICIPAL COUNCIL & ORS.
(Civil Appeal No. 7798 of  2019)
OCTOBER 04, 2019
[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]
Contract:
Work contract  – For laying down sewer system  –  Assigned
by Municipal Council under centrally sponsored Scheme – Non-
payment to the contractor even after completion of 35% of work
–  Writ petition seeking direction to Central Government and State
Government to disburse the funds under the Scheme – Petition
dismissed by High Court – Appeal to Supreme Court – Held:
Contract was awarded by Municipal Council without sanction of
funds by Central Government – Thus, there is no illegality in the
impugned order – However, since sewage system is a necessity, it
would be appropriate for the State to consider and approve the
sewer scheme and seek funds from the Central Government.
Disposing of the appeal, the Court
HELD: Respondent No. 1 Municipal Council has
published public tender for giving contract of laying sewer
without sanction of the funds by the Central Government. The
State Level Sanctioning Committee under the Scheme approved
the Sewage Scheme for the Yeola Municipal Council on July 20,
2013.  Such Scheme was approved by the Ministry of Urban
Development on December 24, 2013 but the concurrence of the
Finance Ministry was sought. Since there was no approval from
the Finance Department, the appellant cannot claim such amount
on the basis of an inter-departmental communication where the
Ministry of Urban Development has sought release of funds from
the Ministry of Finance.  Thus, there is no illegality in the order
passed by the High Court. However, there cannot be any dispute
that sewage system is a necessity in any urban area. The State
Level Committee has approved the sewer for the respondent
Municipality so as Ministry of Urban Development. The funds
   [2019] 13 S.C.R. 646
646
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are to be allotted by the Central Government or the State
Government according to the availability of funds and by
maintaining balance of the requirement of various other local
bodies. Therefore, it would be appropriate for the State
Government to consider and approve the sewer Scheme for
Yeola Municipal Council. If the State Government is unable to
provide funds in terms of its policy, it shall seek funds from the
Central Government under the present Scheme. This course of
action is appropriate in view of approval of the Scheme earlier
by the State Level Committee and by Ministry of Urban
Development. [Paras 8 and 9] [649-C-H; 650-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7798
of 2019.
From the Judgment and Order dated 19.09.2014 of the  High
Court of  Judicature at Bombay, Bench at Aurangabad in Writ Petition
No. 3703 of 2014
Sudhanshu S. Choudhari, Adv. for the Appellant.
K. M. Natraj, ASG, Vinay Navare, Sr. Adv., Ms. Gwen Karthika,
Ms. Abha R. Sharma, Nishant Ramakantrao Katneshwarkar, Anoop
Kandari, Anmol Chandan, Somiran Sharma, Raj Bahadur, Mrs. Anil
Katiyar, Advs. for the Respondents.
The Judgment of the Court was delivered by
HEMANT GUPTA, J.
1. The order dated November 16, 2017 passed by the High Court
of Judicature at Bombay is the subject matter of challenge in the present
appeal. Vide the aforesaid order, the writ petition filed by the appellant
to seek direction to Government of India and Government of
Maharashtra to disburse the alleged approved funds under Urban
Infrastructure Development Scheme for Small and Medium Towns1 was
dismissed.
2. The respondent No. 1 – Yeola Municipal Council issued a public
notice for providing underground sewer Scheme in Yeola city under the
aforementioned centrally sponsored Scheme. The appellant is a
1 for short, ‘Scheme’
M/S. MADHOOR BUILDWELL PVT. LTD. v. YEOLA
MUNICIPAL COUNCIL & ORS.
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
contractor who was assigned the work of laying of sewer system after
being successful in the tender process.
3. The grievance of the appellant is that it has completed almost
35% of the work of laying sewer pipelines but the Municipal Council
is not making the payment for the reason that the Central Government
has not released the funds.
4. The High Court found that under the Scheme, 80% of the
funding comes from the Central Government, 10% from the State
Government and remaining 10% from the concerned Municipal Council.
The said Scheme was discontinued after March 31, 2015. It is the stand
of th
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